They said it – views from 2010 about 2011 revisited

As the end of 2011 draws near, predictions for 2012 are coming thick and fast. Yet, who can claim to have clairvoyant abilities and who is just hoping last year’s analysis will be buried with their financial losses? InvestmentEurope brings you a series of brief outlooks for 2011 as they were.

Simon Mungall, head of Multi-manager at Ignis Asset Management:

“2011 will see the continuation of the market’s obsession with the provision of central bank liquidity to capital markets…the performance of risk assets will be tied to how the market perceives the behaviour of the Federal Reserve and other central banks.”

“There are essentially two competing philosophies. The first, and most honourable, is to increase productivity by education and innovation. The second, which is now looking like the path of least resistance, is to inflate our way out of debt and back to growth by printing money. History has shown us that while this may seem like the least painful option at the time, it can have unintended negative economic and human consequences thereafter.

“Europe will also continue to chip away at the market’s confidence. The ambition of its political bureaucracy has overreached the economic fundamentals of the constituent sovereign states. Whilst there is a very strong practical imperative to keep the euro together, this will require extreme changes to the underlying sovereign political structures. Undoubtedly this process will take decades to complete, but the next 12 months will surely play host to some significant developments in this direction, in parallel with the market continuing to challenge the integrity of peripheral Europe.”

 

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